Defined by Digopaul, a bank is a financial establishment that invests money deposited by customers, pays it out when required, makes loans at interest, and exchanges currency. According to Abbreviationfinder, HSBC stands for Hong Kong and Shanghai Bank Corporation. For song lyrics and albums about banks, please follow Songaah.
In a commercial sense, a bank is a credit institution that offers paid services for the movement of capital. As an entrepreneur, you are probably asking yourself the question: Do I have to open a business account with my bank? Here we explain to you whether you really need a business account. As a credit institution, a bank offers services for payment transactions, credit transactions and capital transactions. In Germany, a credit institution is a commercial company that does banking.
The bank and its general functions
Banks generally perform six main functions. These main functions include:
- Services such as cash transactions
- Granting loans
- Monetary function (total payments)
- (Monetary policy incentives interest rates increase or interest rate or lower)
- Investment function (securities trading)
- Economic function
The classic business basis of banks is in particular the management of savings deposits and lending.
Economic functions of a bank
At the economic level, banks have three main functions:
Deadline transformation – 1st function of a bank
Investors and borrowers often think in different time periods. While investors tend to want to get their money very short-term, borrowers often want long-term loans. Banks offer their customers very flexible investment conditions, for example with checking accounts or overnight money accounts, which can be emptied completely from one day to the next. On the other hand, they lend money for longer periods, often over several years. Deadline transformation poses a risk if banks suddenly lose their customers’ trust. In this case, there can be a “bank run” in which all investors want to have their money paid out at once. Of course, this poses problems for the bank because it lent the money to its customers over the long term.
Risk transformation – 2nd function of a bank
While savers definitely want to get back the money that they invest in banks, there is a risk that the individual debtor will not be able to meet his obligations with every loan granted. Since the bank grants a large number of loans and is relatively well informed about the probability of default on its borrowers, the overall risk from the loans granted is not very great. For their part, investors can therefore assume that they will almost certainly get their savings back.
Batch size transformation – 3rd function of a bank
Investors are often private individuals who have very small savings. In contrast, companies require loans of considerable value. Banks can solve this problem by taking the money of many investors and lending it to a smaller number of borrowers.
The bank and its customer groups
Bank customer groups include private customers, corporate customers, states and other banks. The individual customer groups are described in more detail below.
A private customer is a single person – in contrast to corporate customers or institutions. A bank’s retail banking business is again divided into
- Standard customer: focus on mass business (payment transactions, loans, credit cards)
- Wealthy client: focus on investment advice
Corporate customers are business customers – i.e. companies and institutions. They usually do their business through a company account. The focus here is on lending to companies.
States also belong to a bank’s customer group. The range of offers here includes the granting of government bonds.
In addition to private customers, corporate customers and states, banks also have other banks as customers. This trade between banks among themselves is also called interbank trade.
- ATM Locators
- Bank Directories
- Bank Rates & CDs
- Business Credit
- Car Loans
- Central Banks
- Credit Advice
- Credit Counselors
- Credit Repair
- Credit Reports
- Credit Unions
- Currency Exchange
- Debt Management
- Development Banks
- Electronic Banking
- Getting a Loan
- International Banks
- Investment Banks
- Bankruptcy Law
- Loan Calculators
- Loan Companies
- Rating Agencies
- Student Loans
- Telephone Banking
- US Banks by State
- Legendary Route 66 - Drive the iconic Route 66, past American diners, motels and through the stunning scenery of the United States featured by indexdotcom. The journey goes through three time zones and the eight states of Illinois, Missouri, Kansas, Oklahoma, Texas, New Mexico, Arizona and California. On this road trip you will experience the classic Route 66, also known as “Main Street of America” or “Mother Road”, which for decades was the main road…
- Awesome Road Trip in the USA - This beautiful road trip takes you to beautiful cities and some of the most pristine and beautiful national parks in the southwestern United States listed on itypeusa. Discover places like Las Vegas, Grand Canyon, Monument Valley, Arches National Park, Zion National Park, Death Valley, Yosemite, San Francisco, Highway 1 and Las Vegas. This drive is for you who want to experience the best of the western United States at a leisurely…
- New York and Washington - How about bike rides in the coolest big cities in the USA, Sunday gospel in Harlem, helicopter ride over Manhattan and train travel between the cities. In addition, there is also plenty of time to explore on your own. See listofusnewspapers for mass media in USA. New York and Washington are two of the United States’ most unique and at the same time most typical cities with lots of famous sights. Both cities…
- Family Adventures in the Western United States - Join the family on an adventure in the western United States featured on Smber. We have adapted the route so that there is something for everyone in the family; big cities, national parks, beaches, wildlife, shopping and more. This car trip is adapted for families who would like to go on adventures together in the western United States. The trip starts in San Francisco, where you have a few days on your own…
- Ecuador Economy - ECONOMY: GENERAL INFORMATION Ecuador, while remaining at the bottom of the wealth rankings among Latin American countries, is not entirely devoid of potential. Based on a traditional economy, divided according to the orographic and morphological structure of the country (rain plains, irrigated reliefs intended for self-consumption agriculture, coastal strips occupied by agricultural enterprises oriented to intensive production) the country has suffered, starting from the middle in the 1960s, a profound…
- Family Adventure in Canada - Travel with the family to western Canada with its magnificent nature and beautiful adventures. We have made a travel proposal where you sit less time behind the wheel to instead have time to enjoy Canada’s fantastic national parks and wildlife. It offers the most beautiful scenery in the provinces of British Columbia and Alberta according to best-medical-schools. The journey starts with the impressive national parks Banff, Yoho and Jasper. You then go on…
- Paraguay Population - According to itypetravel, most of the Indian population of Paraguay at the time of the Spanish conquest was represented by Guaraní groups who lived essentially on itinerant agriculture; they welcomed without enmity the first Europeans who came to settle in their fertile lands, but the institution of the encomiendas, where the natives worked almost in a state of slavery, and the forced recruitment had disastrous consequences on them. The action…
- Great Canada Trip - This 21-day road trip offers stunning scenery, wilderness experiences and cozy little towns in British Columbia and Alberta. You travel through the Rocky Mountains with Banff, Jasper and Yoho) and go make the amazing Inside Passage by boat to Vancouver Island. See map of Canada on directoryaah. A classic journey of incredible scenery that starts in Vancouver and takes you east through the Okanagan Valley and Glacier National Park to the…
- Jordan Geography - PHYSICAL GEOGRAPHY The country is geographically identified with the tabular expanses to the E of the Jordan River, which form an integral part of the vast Syro-Arabian desert and sub-desert region. Overall, Jordan therefore corresponds to an arid and rather monotonous plateau whose continuity is broken, on the western edge, by the reliefs that border the Palestinian tectonic depression; this is the section of the Great Rift Valley (or Syro-African…
- Road Trip in Eastern Canada - See Ontario and Quebec’s unique national parks, exciting cities, mighty Niagara Falls and thousands of lakes, streams and beautiful islands. The starting point for this 17 day tour of eastern Canada is Toronto according to ebizdir. The road then leads on to the fantastic national parks to the north. After a stop in the capital Ottawa, the journey continues to Qubec’s national parks where the tranquility and nature are in sharp contrast…